John Commins, for HealthLeaders Media , May 8, 2013

“The drivers [are] both the aging demographic, but also just that people are getting sicker. Chronic diseases are skyrocketing,” says Caroline Steinberg, AHA’s vice president of trends analysis.

“A lot of it has to do with lifestyle factors like obesity. We did look to see if the aging of the Medicare population was driving this and we didn’t find a big change in terms of age. We did find that people are simply getting sicker. That is what a lot of the researchers say, that most of the chronic disease burden is related to lifestyle factors, exercise, weight, that sort of thing.”

The AHA says data shows that between 2006 and 2010, the severity of illness of Medicare patients in the emergency department increased, as did the rate of use, a trend that policymakers fear is leading to higher spending with inadequate reimbursements.

Steinberg says hospitals want the federal government to acknowledge what the data clearly shows.

“We would just like recognition by [the Centers for Medicare & Medicaid Services] that patients are in fact getting sicker and that it is not related to changes in the coding claims, but that we really are seeing patients getting sicker,” she says. “We have run into this problem in the inpatient setting as well, where CMS doesn’t want to pay for rising acuity levels.”

The federal government’s more stringent inpatient admissions guidelines and growing claims denials are also putting more pressure on hospitals to treat Medicare patients in the ED rather than admit them.

“We are seeing an increase by audits by the [recovery audit contractors] and other Medicare auditors that are denying admission for short stays so there is huge pressure on hospitals not to admit patients unless they are very sure that those cases can be fully justified through medical necessity,” Steinberg says.

“Nobody is questioning whether the care provided was medically necessary. They are just questioning whether or not it was provided in the right setting.”

CMS in March said it would change its policy of flatly denying any reimbursements to hospitals that provide medically necessary care determined by auditors to have been delivered inappropriately in an inpatient setting. While that will allow hospitals to re-bill Medicare for hundreds of millions of dollars in uncompensated care, Steinberg says re-billings can only date back one calendar year.

“Unfortunately most of the RAC denials are occurring beyond a one-year timeframe. You can do it, but it is not going to help because that’s when all the denials are happening,” she says.

The AHA report is limited to Medicare claims data, but Steinberg says the advent of expanded health insurance coverage in 2014 under the Affordable Care Act means that EDs will probably see an uptick in usage from other demographics “as more patients become insured and there is still limited access to primary care in many areas particularly in poor neighborhoods.”

“We haven’t looked at what is going on in terms of other populations, but we would imagine that everybody is getting sicker because it’s not like it all happens the day you enter the Medicare program. The obesity and the sedentary lifestyle and the high-stress environment—all those things are risk factors long before you enter Medicare, and a lot of that is exacerbated in the Medicaid population,” Steinberg says.

The AHA report, based on an analysis of Medicare claims data conducted by The Moran Company, also found that use of the emergency department by Medicare/Medicaid “dual-eligible” patients is rising, and; EDs are serving more Medicare patients with behavioral health diagnoses.

The Medicaid Expansion, which has the potential of helping 17 million people get health insurance, and the state-based Exchanges, which will offer even more the opportunity to purchase affordable health insurance at a group rate, are both set to roll out in 2014. Both the expansion and the Exchanges are an important part of expanding access to quality, affordable health care and deserve the attention they are getting.

But it would be nice to see some column inches given to another reform effort from the Affordable Care Act, one that just launched in Massachusetts: an attempt to improve care and lower costs for those who are eligible for both Medicare and Medicaid.

Known as “dual-eligible beneficiaries” (or “dual-eligibles”), this group includes roughly 10 million people nationwide who represent some of the biggest challenges for medical service providers and program administrators.

A quick recap: Medicare is a federally-run program that provides senior citizens and people with disabilities access to valuable health care services, including acute care and prescription drugs. But its coverage is often incomplete, especially for those who cannot afford to pay its premiums or share costs, or those who require long-term care.

There are at least three reasons that costs associated with dual-eligibles are so comparatively high. The ACA tackles two of these reasons directly and, in doing so, hopes to impact the third.

The first issue the ACA takes on is the inconsistencies between the Medicaid and Medicare programs. For example, Medicaid covers wheelchairs for both in-home and out-of-home use, whereas Medicare only covers wheelchairs for in-home use. Each program provides a different set of standards for evaluating the quality of care, for appealing denials of service, and for covering home health services.

MMCO’s report was part of an effort by the federal government to identify points of tension between the two programs and “realign” them if possible. It proposed 29 broad areas as candidates for regulatory fixes and is seeking additional input from the public on these.

The federal re-alignment initiative will only help so much, however. Sometimes valid reasons exist for the differences between the programs–and remember, many Medicaid administrative policies are set by the individual states, not the federal government.

The difficulty–and the second reason for high costs–lies in challenges of coordinating care. Right now, it is all too easy for a program administrator to apply the incorrect standard and wrongly deny care or delay payment. Add to this the fact that more than 43 percent of all dual-eligibles have a mental or cognitive impairment and are not well-positioned to navigate the system, and you have a recipe for a daunting bureaucratic labyrinth.

These programs will allow states and the federal government to experiment with ways to coordinate Medicaid and Medicare coverage to provide patients with quality, cost-effective care. Massachusetts’ program, which began accepting enrollees at the beginning of April, is the first of several experiments that will be launching across the country over the coming months.

Given the complexity of the programs and the vulnerability of the populations they help, advocates will be watching closely to make sure the cure isn’t worse than the disease. But if these two initiatives are effective, it will mean better care for millions of the sickest and poorest Americans, and better care will mean better health outcomes.

It should come as no surprise that the oldest and sickest among us have higher medical bills than average; this would be the case even with perfect alignment and coordination. But many of these conditions, such as heart disease or diabetes, can be controlled, and costs lowered, with proper medical care.

I think you see where I’m going here. Better health care access for everyone is a win for us all.